1. Model validity and quality: Concepts, methods and tools Yaman Barlas Boğaziçi University Industrial Engineering Department 34342 Bebek Istanbul, Turkey ybarlas@boun.edu.tr http://www.ie.boun.edu.tr/~barlas SESDYN Group: http://www.ie.boun.edu.tr/labs/sesdyn/ http://www.ie.boun.edu.tr/labs/sesdyn/

2. Conceptual and Philosophical Foundations Model Validity and Types of Models –Statistical Forecasting models (black box) –Descriptive Policy models (transparent) Philosophical Aspects - Philosophy of Science - Logical Empiricim and Absolute Truth - Conversational justification & relative truth (‘purpose’) - Statistical significance testing (Andersen, D.F. 1980, Meadows, D. H. 1980, Barlas and Carpenter 1990, and Barlas 1996)

3. Two aspects of model validity Structure Validity –Primary importance –Special place in System Dynamics Behavior Validity –Role in system dynamics –The special type of behavior validity in system dynamics –Ex ante versus ex post prediction (Forrester and Senge 1980, Barlas 1996 and 1989)

4. Overall Nature and Selected Tests of Formal Model Validation

5. Logical Sequence of Formal Steps of Model Validation

6. Validity (Quality) ‘Built-in’ vs. ‘Tested’ (Inspected) Problem ID and purpose Time unit and horizon Explicit decision: Is the model discrete or continuous? Perform DT tests (verfication) if continuous Dynamic hypothesis (main stocks, loops and reference behavior) All variables & parameters with explainable meanings All equations with explainable meanings Units and consistency! Use the established principles of good equation writing Use established (generic) formulation structures as appropriate Start with SMALL models (does NOT mean SIMPLE!) Embellish gradually, by adding one structure at a time and testing End with small models! (parsimony)

7. Structure Validity (Simulation Verification) Direct Structure Tests –Crucial, yet highly qualitative and informal –Distributed through the entire modeling methodology Indirect Structure Tests (Structure-oriented behavior) –Crucial and partly quantitative and formal –Tool: SiS software

8. Indirect Structure Testing Software: SiS Based on automated dynamic pattern recognition Extreme condition pattern testing Also in parameter calibration and policy design (Kanar and Barlas 1999; Barlas and Bog 2005)

9. Indirect Structure Testing Software (SiS) Basic Dynamic Patterns

10. Indirect Structure Testing Software (SiS) List of dynamic behavior pattern classes

11. Software Implementation Our Software (SiS) Main ISTS Algorithm Simulati on Software 8 1 2 3 4 Integrator 5 6 7 General Picture of the Processes in Validity Testing mode General Picture of the Processes in “Parameter Calibration” mode

12. Sample Model Used with SiS

13. Validity Testing with Default Parameters Simulation Output (with default base parameters) Likelihood Values of simulation behavior correctly classified as the GR2DB pattern

14. Validity Testing by Setting Parameters Fig1 : Simulation Output (with base parameters) Fig2 : Simulation Output (with changed parameters) Likelihood Values of simulation behavior in Fig2 compared to the NEXGR pattern

15. Parameter Calibration with Specified Pattern The ranges and number of values tried for each parameter Simulation Output (with base parameters)

16. Result of the Parameter Calibration  Best parameter set is 41  Best Likelihood Result: 1.2119776136254248 Best Parameter Set:  1. advertising effectiveness: 0.25  2. customer sales effectiveness: 6.0  3. sales size: 1.0 Simulation Output as Desired (after automated parameter calibration)

17. Parameter Calibration with Input Data A view of the SiS interface during parameter calibration

18. Result of the Parameter Calibration  Best parameter set is 21  Best Likelihood Result: 3.7109428620957883 Best Parameter Set:  1. advertising effectiveness: 5.0  2. customer sales effectiveness: 0.0 Fig1 : Simulation Output (with base parameters) Fig2 : Simulation Output (after parameter calibration to match the input pattern)

19. Behavior Validity Two types of patterns –Steady state –Transient Major pattern components –Trend, periods, amplitudes,...

20. Behavior Validity Testing Software: BTS II

22. BTS II Tools Trend Regression Modely(t) = a + b * t a:1.4272937 b:0.9913937

23. BTS II Tools Moments Moment Calculations # Of Data Points: 100 1st Moment (Mean): 1.4272937 2nd Moment (Variance): 2.7107011

24. BTS II Tools Autocorrelation

25. BTS II Tools Autocorrelation Test

26. BTS II Tools Spectral Density Function dominant period1: 20Value :16.1181481405124 dominant period2: 8Value :0.373946663988869

27. BTS II Tools Cross correlation Max CrossCorrelation: 0.7367365 at lag 0

28. BTS II Tools Amplitude Estimation Modely(t) = a + b * sin ( 2 * π * t / period + c ) a : 1.4272937b : 1.9958872c : 0.3500578 Amplitude Estimate:3.9917744

29. BTS II Tools Discrepancy Coefficient # Of Data Points100 U:0.0363687 U10.0231044 U20.0054147 U30.9714809

30. BTS II Tools Trend in Amplitude

31. constant7.4321903phase angle3.1273996 trend of amplitude: const of amplitude : 10.1432480 slope of amplitude : 12.562881

32. Uses of BTS II and SiS in Model Analysis Analysis: Understanding the dynamic properties of the model BTS II can assist in quantifying, measuring and assessing dynamic pattern components SiS can assist in deeper structural analysis (related to qualitative pattern modes)

33. Uses of BTS II and SiS in Policy Design BTS II can assist in numerical performance improvement policies SiS can assist in more structural dynamic pattern improvement Parameter calibration can be extended to cover automated policy design

34. Implementation Issues More tools User friendliness More thorough (field) testing of the tools Better integration with simulation software...

35. Policy Implementation Issues Validity of the policy recommendation (Robustness, timing, duration, transition...) Finally, ‘validity of the implementation’ itself –Validated model means just a reliable laboratory; implementation validity does not automatically follow; it is a whole area in itself

36. Concluding Observations Validity as a process, rather than an outcome Continuous (prolonged) validity testing Validation, analysis and policy design all integrated From validity towards quality Quality ‘built-in versus inspected-in’ Group model building Testing by interactive gaming

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